The CN Rail derailment happened at 10:40 a.m. CST about 20 kilometres west of the town of 1,300, which is about 230 kilometres east of Saskatoon.
Tim Tschetter, who farms near the wreckage, said he saw the initial explosion when he and his cousin were driving nearby.
"We seen a flash of light. It didn't really make sense until we seen the smoke. Then we realized it was a fire or an explosion," he explained.
Tschetter said CN crews arrived moments later and blocked off the road.
Hazardous materials on board
A spokesperson for CN said 26 of 100 train cars derailed.
Six of them contained hazardous materials, including four that had either hydrochloric acid or caustic soda. The other two had petroleum distillates, CN said.
The thick, black smoke poured out of the wreckage for several hours after the derailment. It was deemed poisonous.
The province deployed its rapid response team with specialized equipment to handle hazardous materials.
The province said in a release it will work with CN and local officials for a co-ordinated emergency response.
About 50 people were evacuated from rural homes and from Clair, a small community about one kilometre from the crash site.
They were sent to Wadena where an operations and reception centre was set up by the province. Students at the Wadena school were kept indoors during the school day.
Traffic was also detoured around routes downwind of the derailment. The province said the detours will continue until the areas are safe.
The provincial government is briefing the media with more details Wednesday at 11 a.m. CST.